Siemens and IBM Win $9.4bn German Army Deal
Posted on: Wednesday, 3 January 2007, 06:00 CST
Siemens Business Services and IBM Corp have sealed the 7.1bn euros ($9.4bn) 'Herkules' project with the German Army, bringing to an end one of the most drawn-out contracting processes ever.
The two companies will update and manage all the army's IT systems and software over the next 10 years, with IBM modernizing its applications and operating its data centers, and SBS managing the infrastructure which includes 140,000 PCs, 7,000 servers, 300,000 fixed-network telephones and 15,000 mobile phones across 1,500 locations.
IBM and SBS will supply the services through a new company they have set up called BWI Informationstechnik GmbH. Each owns an equal share, which together represents 50.1% of the equity of BWI, with the German government holding the remaining 49.9%.
Bidding for the contract started back in 2000, and two years later a consortium named ISIC 21, led by Computer Sciences Corp and including German telecoms operator Mobilcom AG and aerospace group EADS NV, was awarded preferred bidder status. ISIC 21 failed to reach an agreement with the German government, with talks breaking down in July 2004, leaving the door open for the eventual winners, who had originally bid with T-Systems which had pulled out.
The deal is the largest SBS has ever won, and comes just as it is being renamed as Siemens IT Solutions and Services and merged with four other IT related parts of its parent company. The restructuring, which was announced in October, ended persistent speculation that Siemens was planning to sell SBS.
Source: Datamonitor
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